Per- and polyfluoroalkyl substances ("PFAS") are crucial for modern societies and economies. Constituting a large and heterogenous group of man-made compounds, PFAS are integral to many industries, including, aerospace, household equipment, medical devices, and electronics, due to their stability and resistance to heat, water, and corrosion; however, some PFAS compounds have been linked to harmful health effects. Traces of PFAS are now found nearly everywhere in the environment, with a recent biomonitoring survey showing that 100% of the participants had PFAS in their bloodstream. The European Union is contemplating a blanket ban for almost the entire substance class.
This complex setting poses multiple challenges and requires difficult management decisions – as companies from different sectors, regulators and environment authorities not only have to deal with past emissions that are now considered pollution but must also adapt quickly to current and upcoming regulations.
Litigation and legislation
Settlements in the US
The enormous impact of PFAS in the environment leads to the question of responsibility and regulation. In the U.S., major PFAS producers have settled class action lawsuits for billions of dollars. German chemicals company BASF has agreed to pay over USD 315 million to settle a multi-district U.S. class action on alleged drinking water contamination.
The tide of litigations seems to be coming in across the Atlantic – in April 2024, eleven environmental NGOs jointly announced to sue the Dutch government alleging that it failed to take appropriate measures to protect the people against harmful effects of PFAS.
ESG obligations and proposed PFAS ban
PFAS are also on the radar of German and EU ESG efforts. Both the German Supply Chain Diligence Act (Lieferkettensorgfaltspflichtengesetz) and the recently adopted EU Corporate Sustainability Due Diligence Directive (CSDDD) identify non-compliance with the Stockholm Convention, which prohibits manufacture and use of certain PFAS, as a risk to be assessed and mitigated by larger companies.
The European Chemicals Agency (ECHA) has proposed a blanket ban on nearly 15,000 different compounds without substance-specific risk assessments, which would break with established principles of EU chemicals law. The proposal has sparked debate, with over 5,600 comments received during the public consultation phase. This is because many PFAS applications have no viable alternatives, including high-tech sectors, medical devices, and key technologies for a carbon-neutral economy. A blanket ban on PFAS would likely weaken the EU chemicals industry further and increase Europe's dependence on suppliers from Asia, in contrast to geopolitical ambitions of derisking in key sectors like semiconductors and green energy.
Against this background, the German federal government, initially a driver of prohibitive PFAS regulation, has also advocated for risk-based and more targeted restrictions on PFAS. The outcome of the legislative process at the EU level remains to be seen, but most likely not before 2025.
Outlook
While the EU and Member States are debating the right approach, some major manufacturers have already drawn plans to phase-out PFAS-related products completely. While it remains to be seen to what extent such drastic measures shape the regulatory view around PFAS, one thing is for sure – "forever chemicals" are here to stay and their scientific, socio economic and – not least – legal challenges will remain for decades to come.
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